Gold prices fell today, Tuesday, from the highest level in a week, which was recorded earlier in the session, with the rise of the dollar and Treasury yields, amid expectations that the major central banks will tighten their monetary policy once more.
And gold fell in spot transactions 0.2 percent to $ 1706.70 an ounce, by 14:30 GMT, following hitting its highest level since August 30 at $ 1726.49 in the Asian trading session.
US gold futures fell 0.2 percent to $ 1719.30.
The focus of this week will be on the European Central Bank meeting on Thursday when it is expected to raise interest rates by 75 basis points.
It is also expected that the Federal Reserve (the US central bank) will raise the interest rate by 75 basis points also at the monetary policy setting meeting on September 20 and 21.
The dollar jumped to a two-decade high following data showed the US service sector rebounding once more in August, making gold more expensive for overseas buyers.
US Treasury yields rose to their highest levels since June on expectations that the Federal Reserve will continue to raise interest rates. Higher returns increase the opportunity cost of holding non-returnable gold.
As for other precious metals, silver fell 0.2 percent to $18.12 an ounce, and platinum rose 0.9 percent to $853.46, while palladium fell 0.7 percent to $ 2018.37.
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US dollar
The dollar reached its highest level in 20 years after data showed the strength of the economy
written by Alexandra Hartman Editor-in-Chief
The dollar index reached a 20-year high on Thursday and reached a 24-year peak once morest the interest rate-sensitive Japanese yen following US data showed that the economy is strong and resilient, giving the US central bank more room for a sharp interest rate hike to curb hyperinflation.
The dollar strengthened following a government report showed that the number of Americans who filed for unemployment benefits fell further in the past week in line with the strong demand for labor.
The report also showed that layoffs decreased in August despite a sharp interest rate hike that increases the risk of a recession.
The dollar index, which measures the performance of the US currency once morest a basket of six currencies, rose 0.873 percent to 109.81 by 1445 GMT, its highest level since June 2002.
The euro fell 1.24 percent and fell below the level of parity with the dollar to 0.9931 dollars, while the sterling pound reached a new low in two and a half years, recording 1.1522 dollars, and the rate of decline in the latest trading was regarding 0.86 percent. The dollar, which is considered a safe haven, was also supported by aversion to risk assets.
The Japanese yen fell as much as 140.225 yen once morest the dollar, its lowest level since 1998. The dollar rose in the last trading 0.71 percent to 139.94 yen.
The risk-sensitive Australian and New Zealand dollars also saw a sell-off in haven assets and reached their lowest levels since July.
The Australian dollar fell 0.77 percent to 0.67905 and the New Zealand dollar fell 0.78 percent to $0.6072.
The cryptocurrency Bitcoin, which is affected by the appetite for risk, fell below 20 thousand dollars.
Dollar rises after China data, yuan falls with rate cut
written by Alexandra Hartman Editor-in-Chief
The safe-haven US dollar rose on Monday following a fresh batch of disappointing data from China reinforced fears of a global recession, while the yuan fell following the People’s Bank of China surprisingly cut interest rates. China’s industrial production, retail sales and fixed asset investment missed analysts’ estimates on Monday, as the nascent recovery from harsh lockdowns to combat the COVID-19 pandemic faltered. “Of course the bad data from China affects recession fears for the rest of the world,” said Ipek Ozkardskaya, market analyst at Swissquote. He added that this pushed the euro down once morest the dollar. The dollar also received a boost from hawkish comments from Federal Reserve policy makers, in response to early indications that US inflation may have peaked. Richmond Federal Reserve Chairman Thomas Barkin told CNBC on Friday that he would like to see inflation head toward the Fed’s 2 percent target “for some time” before stopping interest rate hikes. The onshore yuan fell to a one-week low of 6.7696 per dollar, compared to the previous close of 6.7430, following the People’s Bank of China unexpectedly cut borrowing costs on medium-term loans and a short-term liquidity instrument for the second time this year. The US dollar index once morest six rival currencies rose 0.25 percent to 105.96, consolidating its position near the middle of its range this month. Analysts will look at the minutes of the Federal Reserve’s latest meeting, due on Wednesday, for more clues regarding what policy makers are thinking, while Friday’s retail sales data will give some fresh insights into the economy’s health. The euro fell 0.24 percent to $ 1.0232, affected by the troubles facing Europe due to the war in Ukraine, the search for non-Russian energy sources and the damage to the German economy from the lack of rain.
The dollar recorded more losses once morest other major currencies on Thursday, following traders reduced their bets that the Federal Reserve (the US central bank) will raise interest rates strongly following US inflation data that came the previous day, weaker than expected. And the dollar index, which measures the performance of the green currency once morest a basket of currencies, remained low in the early hours of European trading, following it recorded its largest daily decline in five months, reaching one percent the previous day. Data released on Wednesday showed that US consumer prices were unchanged on a monthly basis in July following rising 1.3 percent in June. “Yesterday’s data gave hopes that inflation has peaked and the Federal Reserve will need to moderate its rate hikes to keep inflation in check,” currency analysts at German Commercial Bank said in a note. Traders have scaled back bets that the Federal Reserve will raise interest rates by 75 basis points for the third consecutive time at its September policy meeting, and now see a half-point increase in interest rates as the most likely option. The euro rose a quarter of a percentage point to $1.03255. The yen rose 0.2 percent to 132.615 per dollar. Sterling broadly stabilized at $1.22250, following gaining more than 1% the day before.